India’s government discussed a
possible venture with Reliance Infrastructure Ltd., Tata Group
and Larsen & Toubro Ltd. to build an 85 billion rupee ($1.9
billion) stretch of national freight railway.

GMR Group and GVK Group were also among companies at a
meeting on the proposal about six weeks ago, B.N. Rajasekhar,
managing director of state-owned Dedicated Freight Corridor
Corp. of India Ltd., said in a Jan. 17 interview in New Delhi.
The government is also considering offering additional work
including maintenance, he said.

“Gone are the days when the government could put its own
money and do everything,” said Rajasekhar. “Getting new
private funds is essential.”

India has also sought about $9 billion of loans from the World Bank and Japan for the planned freight railway that will
link major cities by March 2017 and halve shipment times. The
government is backing the 770 billion rupee plan as it works to
ease transport logjams in Asia’s third-biggest economy.

“If the economy continues to boom, then we’ll need the
dedicated rail-freight corridor,” said Abhaya Agarwal, the
leader for public-private participation projects at Ernst &
Young in New Delhi. The planned venture could draw “a lot of
interest,” he said.

Rail Network

Dedicated Freight may invite private participation in a
530-kilometer (329-mile) section linking Son Nagar and Dankuni,
both in eastern India, Rajasekhar said. The Ministry of Railways
may decide by as early as March what role private companies may
be able to play and how long concessions would last for, he
said. Rajasekhar is also an Additional Member on the Railway
Board, the main policy body at the Ministry of Railways.

Dedicated Freight’s network will comprise two corridors
totaling about 3,300 kilometers, according to the company. One
will run from Ludhiana, in northern Punjab state, to Kolkata on
the eastern coast, while the other will link New Delhi with
Mumbai on the western coast. The two will intersect at Dadri,
near the capital.

The World Bank may decide this year whether to grant a loan
of as much as $3.5 billion to help pay for part of the eastern
corridor, said Dedicated Freight’s Finance Director R.K. Sinha.
The Japan International Cooperation Agency will probably decide
on a 450 billion yen ($5.4 billion) loan that will support the
western corridor within three months, he said.